House of Commons Hansard #388 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was mennonites.

Topics

Motions for PapersRoutine Proceedings

3:50 p.m.

Some hon. members

Agreed.

The United Church of Canada ActRoutine Proceedings

3:50 p.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

I have a Speaker's statement on Private Members' Business.

As hon. members are aware, by virtue of their office, ministers and parliamentary secretaries are not eligible to propose items during the consideration of private members' business. Currently, among the items in the order of precedence, there is one Senate bill standing in the name of a member recently appointed as a parliamentary secretary, Bill S-1003, an act to amend The United Church of Canada Act.

As a result, Bill S-1003, which is awaiting debate at second reading, is now without eligible sponsors.

The principle expressed at pages 558 and 1,138 of House of Commons Procedure and Practice, third edition, provides that bills remain on the order of precedence since they are in the possession of the House, and that only the House can take a further decision on them.

In accordance with past practice, if no action is taken by the House at the appropriate time, this item will be dropped from the Order Paper, pursuant to Standing Order 94(2)(c).

I thank members for their attention.

The House resumed from February 22 consideration of the motion that Bill S-6, An Act to implement the Convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, be read the second time and referred to a committee, and of the amendment.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

3:50 p.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

I wish to inform the House that because of the deferred recorded divisions, government orders will be extended by 18 minutes.

Resuming debate, the hon. member for Vaughan—Woodbridge.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

3:50 p.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Mr. Speaker, it is great to be here this afternoon. Bill S-6 is along the lines of what our government's platform and agenda has been over the past three and a half years. The bill fits well within our tax treaties with our international partners and international organizations. It is a routine bill, a routine tax convention, which we need to have implemented.

If I may, I will take a step back in terms of what our government has done over the last three years with regard to improving our tax system, investing in the CRA and investing in middle-class Canadians. Yesterday we had Statistics Canada report to us on the annual Canadian Income Survey, 2017. As an economist by training and someone who reads the daily notices from Statistics Canada, it was wonderful for me to see this report. It was wonderful to know that from the work we have been doing for three years, not only have 900,000 jobs been created by hard-working Canadians and Canadian entrepreneurs but also that the growth that has occurred is inclusive, widespread and benefiting Canadian families from coast to coast to coast, including families and their children in my riding of Vaughan—Woodbridge. It was great to see that over 850,000 Canadians have been lifted out of poverty.

We based our platform three years ago on the Canada child benefit, which benefits nine out of 10 Canadians. It is tax free, simple and monthly. We based it on cutting taxes for nine million middle-class Canadians, which benefits them and their families. We also asked the 1% of Canadians, the wealthiest, most fortunate in our country, to pay a bit more. Now we see the fruits of those results, which have lifted hundreds of thousands of Canadians and their families out of poverty.

We ran on a platform of strengthening the middle class and helping those working very hard to join the middle class. I am happy to say that we are getting there. We have seen our poverty rate decline significantly. We know we have more work to do.

We have seen tens of thousands of seniors now being lifted out of poverty. That 10% increase in the guaranteed income supplement for our most vulnerable seniors is benefiting my riding and the 17,810 seniors who, according to Statistics Canada, live in my riding of Vaughan—Woodbridge. I know that 1,530 of those vulnerable seniors in my riding received, on average, $800 more every year from the 10% increase in the guaranteed income supplement we campaigned on, that we promised and that we implemented.

I look at this Canada–Madagascar tax convention bill, Bill S-6, as another step forward in improving our tax treaties with our international partners and in building a stronger Canada by ensuring that all Canadians pay their fair share of taxes and that all Canadians can depend on the services that we, as a government, deliver. When I say we, I mean all members of Parliament.

Over the past three years, we have taken action on multiple fronts to ensure that this happens, because when everyone pays his or her fair share, the government can continue to deliver the programs and services Canadians need while keeping taxes low for middle-class families. Again, I allude to the fact that we cut taxes for nine million Canadians, as we promised at the outset. Promise made, promise kept.

As members know, one of the government's first actions was to cut taxes for middle-class Canadians. Over nine million Canadians are now benefiting from this change, with nearly $20 billion over five years of tax relief for families from coast to coast to coast. To help pay for this middle-class tax cut, we asked the wealthiest to pay a little bit more.

Next we made changes to better provide targeted, more generous and simpler support for Canadian families with children. We accomplished this with the introduction of the Canada child benefit, or the CCB, which was implemented, proudly, on July 31, 2016.

In my riding of Vaughan—Woodbridge, in looking at the numbers for one of the time periods, I see that nearly 17,000 children benefited, and 9,510 payments were made on a monthly basis for nearly $5 million.

If I look quickly at the numbers for the year, I see that nearly $57 million was paid out from the Canada child benefit to families in Vaughan—Woodbridge. That is incredible. That is lifting families and their children out of poverty. That is helping families save for a rainy day and pay for their kids' winter boots. I understand it is a snow day back home in Vaughan—Woodbridge and that the buses were cancelled. If those funds paid for those kids to have an extra pair of boots or a new pair of boots, then I am proud of that.

The CCB is particularly helpful for families led by single parents. These families are most often led by single mothers, who tend to have lower total incomes. In fact, close to 95% of CCB amounts paid to single parents with incomes below $30,450 are paid to single mothers.

The government is committed to ensuring that Canada's tax system is fair, effective and competitive. I am certain that all hon. members know how important small businesses are to Canada's economy. They account for 70% of all private sector jobs and are vital drivers of economic growth in communities all across the country.

In looking at Bill S-6 and this tax convention with Madagascar, we see that this is another tax treaty that is made for the benefit of businesses on both sides of the Atlantic. We need to know that we as a country are eliminating barriers to investment and eliminating barriers to trade, and we have done that with the implementation of CETA and the implementation of the CPTPP and, mostly recently, the newly signed USMCA accord with the United States and Mexico, our two largest trading partners.

This is about creating good middle-class jobs, growing the economy, and growing the economy in an inclusive manner that benefits all Canadians, all middle-class Canadians and all those working very hard to join the middle class.

When small businesses succeed, Canada succeeds. That is why the government reduced the small business tax rate to 10% in January 2018, with a further reduction to 9% coming on January 1, 2019. These low tax rates will enable small businesses to create good, well-paying jobs in communities across Canada.

We know that the best poverty reduction plan is a job. It is giving Canadians skills training and lifelong learning. Hard-working Canadians and entrepreneurs, such as the 13,000 small business owners in the city of Vaughan and in my riding of Vaughan—Woodbridge, have created approximately 900,000 jobs in Canada since we were first elected. The unemployment rate hit around 5.4%—I think it is at 5.6%—because people are being drawn into the labour market. The unemployment rate is at a 40-year low, something that we should be proud of.

We know there is more work to do, but the fact is that there are over 500,000 job openings in Canada currently. The fact is that people from all over the world want to come and work and invest in our country. There is a reason for that: We have the best entrepreneurs, we have one of the best educational systems in the world, and we are a great place to invest. We have access, through three major trade deals, to all our major trading partners. We have free trade access to over 1.6 billion people, and businesses across the world know this.

These low tax rates will enable small businesses to create good, well-paying jobs in communities across Canada. When we say we expect these results from small business tax cuts, it is because we have a track record of success, giving us confidence in the direction we are headed.

Many positive signs tell us our plan is working. Since 2016, hard-working Canadians have created—as I said, to re-emphasize—hundreds of thousands of jobs, pushing the unemployment rate to a 40-year low and giving Canada one of the strongest records of economic growth in the G7.

Canadian workers are experiencing the strongest wage growth in a decade. We have seen some of the numbers that came out yesterday from the Canadian income survey, showing that after two years of stagnation, wages are on the rise and incomes are on the rise. That is more money in the pockets of Canadians, whether they are low-income, middle-class or upper-class. That is a good-news story. It is more income to invest, more income for Canadians and their families to save.

Most importantly, I would argue, as we compare our finances of governments around the world, that we have had the flexibility in Canada to invest in Canadians. We invest not only in skills training and the Canada child benefit but also in infrastructure through a $180-billion, 12-year infrastructure plan. We sat down at the table with our municipal, regional and provincial partners and worked on both the urban side and rural Canada, where we invested funds in both broadband and public transit. That is due to the inherent flexibility in our fiscal strength in Canada, where we can make these investments and plan for the long term.

Canada's net debt-to-GDP ratio is the lowest among all G7 countries, and we intend to maintain it and bring it down over the medium and long term. However, we understand, as Canadians do, that more needs to be done to encourage long-term economic growth. As I said earlier, one of the things we need to do is ensure that everyone pays his or her fair share of taxes. It is unacceptable that some corporations, both foreign-owned and Canadian, take advantage of Canada's tax rules to avoid tax. It is unacceptable that some wealthy people use offshore jurisdictions to hide income and evade tax.

I am happy to re-emphasize that we as a government, since taking office, have invested nearly $1 billion in CRA to provide it with resources, after a number of years when the prior government cut funding to agencies like CRA and did not allow them to have the tools to do their jobs effectively. We have reversed that. Canadians understand and appreciate that, because our services are delivered and funded through taxpayers, and, as a government, we respect them. We have lowered taxes for nine million Canadians, but we have also asked the wealthiest 1% to pay a little more, and those who attempt to avoid paying their fair share need to be held accountable.

We have addressed base erosion and profit shifting, which was recently debated in the House and which we had the pleasure of speaking to, and we have worked with our multilateral partners to look at ways to deal with transfer pricing for corporations, strengthening the exchange of information with our multilateral partners and providing the tools to CRA to do its job effectively. We need to ensure that corporations and wealthy individuals continue to pay their fair share of taxes and that our tax laws are being enforced judiciously, diligently and effectively.

In order to stop this profit shifting from happening, the Canada Revenue Agency needs information from foreign jurisdictions. That is why the tax convention in this bill puts in place measures to make possible the exchange of tax information from one country to the other. Bill S-6 would help Canadian tax authorities prevent international tax evasion while gathering the information they need to enforce our tax laws.

Canada's network of 93 income tax treaties currently in force is one of the largest in the world. However, we must keep updating and expanding this network in order to encourage international trade and make it easier for other countries to invest in Canada. In this way, getting our tax treaties in order will help the Canadian economy and Canadian businesses compete globally and enable them to hire workers, invest, grow our economy and improve the future of middle-class Canadians, such as those living in my riding of Vaughan—Woodbridge. Bill S-6 gives Canadians more certainty about the tax implications involved in doing business with, working in or investing in Madagascar.

This bill would make our tax system more efficient, while also ensuring tax fairness for Canadians who already pay their fair share. It would encourage more foreign investment in Canada, remove barriers to international trade and help grow and strengthen the middle class across the country. I encourage all members to support this bill.

As I conclude my remarks on Bill S-6, an act to implement the convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, I see this bill much like Bill C-82 on base erosion and profit shifting and much like the work we have done in the finance committee on a study with regard to tax avoidance and tax evasion, which was done very judiciously by the finance committee.

It is great to see committees doing the work that they are tasked to do independently. They work judiciously, make recommendations and produce reports, which are then looked at both externally and internally by ministers.

On this issue of a tax convention and its implementation, it is obviously very important for Canada as a country to work with all of its international partners, no matter how big or small, no matter how near or far, to ensure that we have the proper information exchanged between the two entities so that on a technical basis we ensure that we eliminate double taxation between the two countries for individuals investing both ways, reduce the risk of burdensome taxation and ensure that taxpayers are not subject to discriminatory taxation.

In closing, I will say that by strengthening our ties with Madagascar, our government is seeking out the kind of investments and trade opportunities that are vital to grow the economy.

I have spoken about the treaties we have put in place on the trade front, such as CETA, CPTPP and USMCA. I have also spoken of our plan to grow the economy by lowering taxes for middle-class Canadians and asking the 1% to pay a little more, and the results are bearing fruit. The numbers that were produced yesterday by Statistics Canada show that over 850,000 Canadians have been lifted out of poverty in the last two and a half years. These are real people working hard every day to provide for a better future for themselves and their families. We as a government will continue to invest in them, believe in them, work with them and work with all of our partners.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:05 p.m.

NDP

Cheryl Hardcastle NDP Windsor—Tecumseh, ON

Mr. Speaker, I am very disconcerted by my Liberal colleague's speech today, because Canadians understand that all is not well. The results of the government's actions are not bearing fruit for everyone. We have reports right now that there are more people living with disabilities who are using food banks. We have more people living in poverty. We have more homelessness. We have more people not able to afford their first home. Last month, we had the media reporting that 46% of Canadians are within $200 of financial insolvency. These are very profound facts that speak to the realities of regular Canadians.

A tax regime is just a part of the systemic issues that we have to address. What about stock option loopholes? I have not heard anything about how we are going to address problems in dealing with corporate bailouts, for instance. What about pension reform? These corporations need to be taking their responsibility for their workers and retired workers more seriously.

It is true that we will be supporting this tax regime with Madagascar. However, the situation is very disconcerting, and it is disingenuous to hear our economy being painted with this healthy brush. A lot more work needs to be done. What is next in line that needs aggressive overhaul in our tax regime?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:10 p.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

Before we go to the answer, I would remind hon. members in the House that the other day when we debated this bill, there was a lot of talk about everything but the treaty between Canada and Madagascar. Therefore, I would ask hon. members, whether they are giving a speech or asking a question, to try to stay on topic and be as relevant as possible.

The hon. member for Vaughan—Woodbridge.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:10 p.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Mr. Speaker, this tax convention entered into by Canada and Madagascar is based on the OECD Model Tax Convention. The convention is expected to contribute to the elimination of taxes, to trade and investment between Canada and Madagascar and to solidify economic linkages between the two countries. It is similar to other models of tax conventions that Canada has entered into with 93 partners around the world.

To answer the other part of the question from the hon. member for Windsor—Tecumseh, our government is not stopping. We are working to ensure that all Canadians benefit from the growth in our economy. We know that one person looking for work is one too many. We want to ensure people have the skills to find that first or second job or transition from one job to another.

Individuals who are helped through the Canada child benefit will now benefit from the Canada workers benefit, which again is targeted at low-income Canadians. It will lift literally 75,000 people out of poverty. It can provide Canadians with additional hope along the lines of what our values are as a government, which is to ensure that all Canadians are included in the growth and, more important, that no Canadian is left behind.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:10 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I thank my colleague for his speech and many interventions at the Standing Committee on Finance. I know that he is very knowledgeable about his files, especially tax conventions and double taxation agreements, which aim to help our corporations be successful and to ensure tax fairness for corporations that do business abroad.

With Bill C-82, the government hopes to revise all our tax conventions because public officials have indicated that some taxpayers abuse them. I know that my colleague is very conversant with Bill C-82 as well.

Would he also acknowledge in the House that, absent the changes provided for in Bill C-82, our tax conventions are being abused by certain Canadian taxpayers in order to avoid paying their fair share of Canadian taxes?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:15 p.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Mr. Speaker, I thank the member from Quebec for his question. I would like to answer in French, but it is a bit tricky.

Our government has invested over $1 billion in the CRA to provide the wonderful folks who work there with the services and tools they need to ensure that all Canadian organizations, including multinationals, pay their fair share of taxes.

Our government is working extremely well with our international partners to ensure that tax avoidance, because there is a difference between tax avoidance and tax evasion, is brought down, that we ensure corporations and high net worth individuals do not take advantage of loopholes. We are closing loopholes. We are investigating. Most important, we have the right tools to do such a thing and CRA and its associate partners have those tools. This will be very effective with Bill C-82, base erosion profit shifting.

We all know that under 10 years of the former government, under the Harper regime, that money was cut from the CRA and it was unable to do its job effectively and diligently for hard-working Canadians, much like the ones in my hon. colleague's riding, who I was able to serve with on the finance committee, and those wonderful Canadians in my riding of Vaughan—Woodbridge.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:15 p.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

Before the member begins, I want to remind members that we are debating Bill S-6 on the trade agreement between Madagascar and Canada, in case they are wondering what the topic is and they stray a bit.

Resuming debate, the hon. member for Haliburton—Kawartha Lakes—Brock.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:15 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Mr. Speaker, I was just paying attention to the testimony going on at the justice committee. If people are watching at home, I suggest they turn to that and watch the testimony by the former attorney general. It is quite rivetting. I will not take offence if my words get missed.

It is my pleasure to speak to Bill S-6, an act to implement the convention between Canada and the Republic of Madagascar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. In November of 2016, the convention was signed between the governments of Canada and Madagascar. While reviewing the bill, I was surprised to learn that we have had diplomatic relations with Madagascar for nearly 55 years.

In terms of economic activity between our two countries, Canada imported $100 million in goods last year. The bulk of these imports were mineral and vegetable products. Madagascar imported $16 million of Canadian goods last year. Global Affairs Canada reports that Canadian direct investment to Madagascar was $28 million in 2017. Canada has mining companies there. We do business with Madagascar.

Since 1976, Canada has entered into similar tax agreements with countries all around the globe. In fact, we currently have 93 such agreements in place. The main purpose of the convention is to eliminate double taxation and prevent international tax evasion.

I want to support Bill S-6 and the international efforts coordinated by the organization for Organisation for Economic Co-operation and Development aimed to reduce treaty shopping for tax havens. However, the bill reminds us that the government's overall approach to addressing international tax evasion is inadequate and more needs to be done.

I had the pleasure of rising in the House on September 28 of last year to speak to Bill C-82, an act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting. For the benefit of those at home and as a reminder to my colleagues in the House, Bill C-82 aims to make it more difficult for corporations to hide money in offshore tax havens.

What is double taxation? It is a taxation principle referring to income taxes paid twice on the same amount of earned income. It could occur when income is taxed at both the corporate level and the personal level. It also occurs in international trade when the same income is taxed in two different jurisdictions.

I had a number of concerns with Bill C-82. I will not repeat them all here, but one of my major concerns, which is an underlying problem with these agreements, is this. I really have no problem with the agreements that inevitably make other jurisdictions more attractive to Canadian investment. Promoting investment in Canada should be a priority for the federal government, but in truth we live in a global community with economic opportunities for Canadians outside the country, whether through direct investment or indirectly through mutual or pension funds.

What I see as a problem is when the government fails to support competitively lower taxes for Canadians and businesses domestically. With respect to businesses, we need to lower corporate taxes, reduce red tape and create an investor-friendly climate. This is something we must do in concert with bills like Bill C-82 and Bill S-6.

We have companies moving from Canada to the United States because of a lower corporate tax regime. If we want to stop the use of tax havens, we need to make it attractive to invest at home and make tax rates competitive with other jurisdictions. The more investment dollars we can attract and retain in Canada, the less taxes we need to spend in pursuit of those who exploit loopholes in tax rules.

Let me be clear. The Conservatives support measures to crack down on tax evasion. Aggressive tax avoidance is a major source of lost tax revenue for high tax jurisdictions like Canada. The vast majority of citizens and businesses in Canada pay their taxes and follow the rules. We need a competitive and fair tax system for all Canadians and corporations that do business in Canada. That is fundamental to a healthy and equitable economy.

During the fall economic statement, the Minister of Finance confirmed that the Liberals were borrowing about $18 billion this year and almost $20 billion next year to pay for their spending, and they have no plan to balance the federal budget. This year's deficit is more than three times what the Prime Minister said it would be. He has added $60 billion in debt.

We are giving the impression to Canadians, through bills like Bill S-6, that the Liberal government is more interested in hunting down tax evaders in Madagascar, although I am not aware of an outbreak of tax evaders in Madagascar, than creating a fair and equitable system here in Canada.

Canadians know that one does not need to be an economist to understand that more debt today means higher taxes tomorrow. Tax treaties might be important, but something that is far more important is the halting of the ongoing plundering of our children's economic futures.

Canadians are going to pay higher taxes once the government's Canada pension plan tax increases are fully implemented by 2025. That is up to $2,200 per household. The Prime Minister's national carbon price, the carbon tax, will cost up to $1,100 per household. Canadians are going to pay more in future taxes to service the interest on the government's ballooning deficit fuelled by out-of-control spending.

The Liberals' previously proposed tax grab would have forced business owners in Canada to pay 73% on savings income, penalized family businesses for sharing earnings and work with family members and doubled the tax on the sale of a farm from parents to children, forcing them to sell to multinational corporations instead.

This is not how we create a friendly investment climate in Canada. This is not how we create wealth and lift people out of poverty. This is not how we safeguard our children's future.

The previous Conservative government signed tax agreement's like Bill S-6, but we did this in concert with reducing taxes for Canadian families and businesses. The average Canadian middle-class family is paying $800 more income tax today than it did before the Liberal government took office in 2015.

The Conservatives implemented family tax cuts, arts and fitness tax credits and education and textbook credits, all of which were cancelled by the government.

Bill S-6 is more than just about cracking down on tax evaders. Trade and commerce between two countries are supported by these agreements. That is why our previous Conservative government signed a record number of them.

Under the previous Conservative government, Canadian workers and businesses won free trade access to more than 50 countries around the world, creating hundreds of thousands of jobs and opportunities for everyone. In just three years, the Prime Minister has failed to secure a trade deal with China and delayed and nearly derailed plans for Canada to join the CPTPP trade agreement.

Worst of all, the Prime Minister made massive concessions to the United States at the NAFTA negotiation table. He backed down on cars, giving the U.S. limits on how many cars we could export. He even backed down on pharmaceuticals, giving the U.S. higher profits at the expense of Canadians from coast to coast to coast. Canadians cannot bid on American government contracts and we still have tariffs on steel, aluminum and softwood lumber, with no timeline to end them.

Bills like Bill S-6 are important and need to be supported. Tax evasion is a real issue. We need to crack down on tax evasion, but we also need to support lower taxes for Canadian businesses. We have lost out on tens of billions of dollars' worth of investment because of the government's misguided fiscal policies.

Investment is fleeing, we are losing jobs, families are worse off than they were before and we are going in the opposite direction with respect to what most countries are doing by lowering taxes and making themselves investment magnets.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:25 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I appreciate the opportunity to respond to a number of the concerns and issues raised by the member opposite.

In his conclusion, he indicated that we were losing jobs. We know there is a Conservative spin machine behind the wall and speaking notes that are not necessarily accurate or reflective of the reality of what is actually taking place in Canada.

Again, he has tried to give the impression that Canada is losing jobs. Nothing could be further from the truth. We have actually seen well over 800,000 jobs created in the last three years by working with industries and Canadians in every region of our country.

Could the member reflect on the number of jobs that have been generated in the last three years and compare that to Stephen Harper's work when he was prime minister? It is totally night and day, Mr. Harper being the night. We are seeing substantial growth taking place. How does the member reconcile those facts with his closing comments about massive job losses?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:25 p.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

I just want to remind hon. members that we are debating Bill S-6, a treaty between Madagascar and Canada.

The hon. member for Haliburton—Kawartha Lakes—Brock.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:25 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Mr. Speaker, first, the American economy is going along very well. There are seven million unfilled jobs in the United States right now. They are begging for workers. Canada is benefiting because of that, because of our trade agreements with the United States.

If we look at the energy sector, we are losing tens of billions of dollars in investment in the resource sector as we speak. Investments have already left. We already heard, just a few short weeks ago, that yet another energy company is leaving Canada to invest its money elsewhere. It does not see this as a friendly place to do business. When we see hundreds of thousands of people out of work in the Prairies and beyond, because the Liberal government has not created an environment that allows private sector growth to succeed, especially in the resource industry, we have a problem.

When we look at the mining industry, we do have mines in Madagascar. They are Canadian companies. The mining companies in Canada are extremely concerned about the Liberal government's policies. They do not see much of a future going forward, because they do not see certainty in the process. Especially in the northern areas, in Yukon, Northwest Territories and northern British Columbia, which rely on mining as a way of life and for their economy, when that certainty is taken away and companies are looking elsewhere for investment, we are not looking forward enough into the future to be able to save those jobs and ensure there is a future for our children.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:25 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I thank my colleague for his speech, though his remarks were a little unsettling at times. In fact, the member seems to probably have a different view of taxes than most Canadians.

I have a very specific question, which I will ask him after providing a bit of context. At this time, all governments around the world are in a race to lower taxes. All countries are competing on taxes. My colleague seemed to suggest that the solution is to take part in this race to the bottom and to make our taxes as low as those of tax havens. This would allow us to compete with them, stop the flow of money that should stay in Canada and return money to Canada thanks to lower taxes.

Is the Conservatives' position really to have taxes that are just as low as those of tax havens to ensure that there will be no loopholes and that Canadians will no longer use tax havens? Is that the Conservatives' position?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:30 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Mr. Speaker, I did say in my speech that I believe tax evaders need to be dealt with according to the law, but as we are talking about bringing investment dollars back to Canada, I will give my friend opposite this headline from Reuters from December 31, 2018: “U.S. companies repatriate over half a trillion dollars in 2018”.

I will quote the article: “The change offered a powerful incentive to bring home some of the $3 trillion U.S. firms were believed to hold in jurisdictions” outside of U.S. borders.

That is because the U.S. changed the regulation and the tax system. This way, companies were able to bring those dollars they were keeping offshore back to the United States, which would then be taxed and the country would be able to use those tax dollars to spend on the programs they chose.

We want to tax them at a fair level, but we also want to get that money back into Canada so that we can use it here, rather than having it held offshore. We say there is a difference.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:30 p.m.

Conservative

Luc Berthold Conservative Mégantic—L'Érable, QC

Mr. Speaker, I listened closely to my colleague's speech.

I wonder if he believes that it is critical for a society like ours to enter into as many such agreements as possible to help establish clear and precise rules for companies and business owners, people who do business abroad. How will the bill before us help achieve those objectives?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:30 p.m.

Conservative

Jamie Schmale Conservative Haliburton—Kawartha Lakes—Brock, ON

Mr. Speaker, I appreciate my friend for that last-second question. It was a fantastic question.

Basically, as we have been saying all along, jobs are not created because the government says it is going to create jobs or comes up with the next new great government program. Jobs are created by having low taxes and reasonable red tape and regulations. That is how we get jobs started in our country.

Increasing taxes, rules and regulations to the point where they are strangling business investment, strangling those trying to get ahead, is not how we move forward.

My area has a lot of agriculture, so I will use this as an example. If there are two, three or four inspectors on a farm, constantly, over-regulating, creating more red tape, basically putting a stranglehold on that farmer, preventing him or her from producing the food that we need, it becomes harder and harder for that farmer to produce an income for his or her family and to provide for his or her children.

When it becomes more lucrative to regulate farming than it does to actually farm, we have a problem. This is why we keep harping on and on about the economy, and why we need the right formula to repatriate those dollars that corporations are keeping outside the boundaries, bring them back into Canada so that we can tax them at the tax rate here, and also have low taxes here at home and reasonable red tape and regulations so that businesses can start up, expand, invest in their workforce and in research and development, and continue to grow, creating jobs, opportunities and wealth in our communities.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:35 p.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

Order. It is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Elmwood—Transcona, Canada Post Corporation.

Resuming debate, the hon. parliamentary secretary to the government House leader.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:35 p.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, it has been an interesting debate. I was here the other day when we were talking about Bill S-6. It goes to show that members on both sides of the House really want to have that discussion about taxation and Canada's economy. There is a lot of contrast between the Conservatives, New Democrats and the Liberals on those types of issues. What I thought I would do is provide what I think is a fairly accurate snapshot in terms of the types of things that we have seen, and Bill S-6 is a good example of that.

Bill S-6 is about Madagascar and Canada achieving a tax agreement. However, tax agreements are not new. There are tax agreements between Canada and many other countries, but when we look at the bigger picture, we see that Canada is in fact a trading nation. In order to sustain ourselves going forward, trade is critical and of the upmost importance for all Canadians, whether they are directly, indirectly or not at all engaged in trade, particularly with the exports of services, goods, technology and so forth.

Over the last few years, we have seen the government, on a number of fronts, focus its attention on Canada's middle class, and one of the ways was by dealing with the issue of tax fairness between Canada and other countries. One of things we have to look at is the OECD and the tax conventions. We have to take a look at the individual tax agreements that we have been able to achieve, and Canada has seen dozens of tax agreements achieved over the last number of years. All of this assists us in facilitating trade and investment. We are very much dependent on that.

I have stood in my place on numerous occasions talking about the importance of the middle class. When we talk about how we support the middle class, we address it directly by saying that, as a government, the first thing we did was bring in legislation to cut the taxes for Canada's middle class, which was a very popular piece of legislation, at least on this side of the House. It was very well received by Canadians throughout the country, because it literally put hundreds of millions of dollars directly into the pockets of Canadians. However, less direct but just as supportive for Canada's middle class is our aggressive trade agenda, which takes place in different forms, such as in legislation, budgetary announcements and discussions among different levels of government, with ministers and internationally with governments around the world.

In a relatively short period of time, we have seen a good number of agreements reached between Canada and other countries. The previous speaker made reference to Stephen Harper and 50-plus trade agreements, but that is not necessarily accurate. However, I will give credit where it is mostly due, and that is with some incredible civil servants who have been at the table negotiating on Canadians' behalf. They recognize the importance of international two-way trade and the potential for agreements with many different countries.

Within a few months of our taking office, our Prime Minister was in Ukraine, signing off on a trade agreement. We were all very proud of that. There is a valid argument to be made that a good portion of that work was in fact done by the previous administration, but let there be no doubt that it was actually finalized through this government.

The significant trade agreement that has so much opportunity for firms and companies across Canada has to be the European Union trade agreement. This agreement was off the rails. It was because we were aggressive on that trade agreement that we were able to get it back on track and ultimately bring it across the line. We still have to see other countries sign off on it and so forth, but that was an agreement that was achieved under this administration.

We can also talk about the trans-Pacific partners that we have, and the trade agreements that have been achieved there. Earlier today, I was talking to one of our ministers, and he was mentioning that because Canada was one of the original six who actually passed it off, we were able to deal with some other issues that allowed us to benefit more than other trading partners within the trans-Pacific agreement, which has enhanced our export sales of industries dealing with pork, cattle and more.

Whenever I hear of pork being sold outside of Canada, I think of the fabulous, fantastic pork industry that we have in the province of Manitoba. We actually have more pigs in Manitoba on an annual basis than we have people. We are a great exporter of the best pigs, I would argue, in the world. We have a product that is in high demand, and it is creating thousands of jobs in my home province. In Brandon, Winnipeg or Neepawa, three beautiful communities in Manitoba, we get a sense of the size of the pork industry, not to mention the many farmers and other individuals within our agricultural community. There are many success stories as a result of that one industry.

There are many different industries out there that have benefited directly as a result of the aggressive trade agenda of this government. That is something that has assisted in the generation of hundreds of thousands of jobs in the last three years. That is something that should be recognized, at least in part.

When we talk about the tax agreements with other nations, we should be reflecting on how important it is, as much as possible, to get that level playing field. Having these tax agreements allows us to move that much further ahead in serving Canadians, because it is about trade and investments.

We understand how important it is to watch and be very diligent about tax avoidance and tax evasion, and we know they are very different. I would like to think that as a government we have been very progressive in our thinking and actions to ensure we are minimizing the amount of evasion and avoidance out there.

A couple of years ago, the Minister of National Revenue, the minister responsible for the CRA, announced well over $400 million to deal with individuals trying not to pay what we would argue is their fair share of taxes, through tax avoidance.

When we think of the money that is lost as a direct result of both avoidance and evasion, we are going into the hundreds of millions, into billions of dollars on an annual basis. It is hard to believe that for 10 years, while Stephen Harper was our prime minister, very little was done on that file. It took our government to say we need to put additional resources in the budget in order to ensure that the CRA is better equipped to go after those who are avoiding paying taxes, or those who are evading paying their fair share.

It is not like it was a commitment of just one budget. The following year, once again, we saw hundreds of millions of dollars invested in the CRA in order to again deal with the issue of tax avoidance and evasion. In total, we are probably looking at somewhere in the neighbourhood of close to a billion dollars of additional resources that have been allocated in order for us to deal with those two very important issues.

As a government, we see these tax agreements. Today, it is about Madagascar. We have seen other tax agreements achieved that allow the Canada Revenue Agency and the many different departments involved to continue to build relationships with other countries through tax agreements.

Most countries around the world recognize that in order for us to move forward where there is more world wealth, we need to do what we can to enhance trade. There is a sense of competition, and we have to be in a position to compete.

I differ from my colleague across the way, when he said that all we have to do is lower taxes and the jobs will come. Arguably, that is the formula Stephen Harper attempted with the boutique taxes. He reduced the GST. I will give him that. However, we need to recognize the economic performance of the 10 years of Stephen Harper's governance. We will find that in many ways the economy moved ever so slowly forward. We have created more jobs in three years than the Conservatives did in over 10 years.

My friend across the way talked about investment and said investment is leaving the country. The Conservatives have to take some responsibility for that loss of investment. The example the speaker before me gave was in reference to our oil industry. He talked about investments leaving the country because of pipelines not being built. I would challenge members across the way to reflect on that. On these tax agreements and trade agreements, we believe Canada has the competitive edge. If we are on a level playing field, we will do exceptionally well.

I think of what we could have been doing as a government, because we need to recognize that there is a role for the government. Far too often, the previous administration would step aside and not take action. Let me use the very same example that the previous speaker used, the issue of pipelines.

Over 99% of the oil that comes out of our ground goes first to the U.S. through the lines that are currently in place. That was the case when Stephen Harper became the prime minister of Canada. When Stephen Harper lost the election in 2015, that was still the case. The Conservatives were completely reliant on the U.S. market, and that is one of the reasons that sector is hurting today.

When the Conservatives talk about taxation fairness and the importance of tax agreements and so forth, yes, that is really important. However, when my colleague from across the way tries to give the impression that it is the only thing the government needs to do, he is wrong in that assertion.

We have a government that was prepared to move forward to get that commodity to new markets. We were able to acknowledge that by setting up a process that takes into consideration indigenous issues, environmental issues and others. It might not be happening as fast as the opposition members would like, but they had 10 years and it did not change.

If we go back to the issue of trade and commerce, and how we attract investments, I would suggest that in the future we will see many of those oil or commodity dollars continue to be invested in Canada, because we are in many ways giving attention to issues of our environment, with green technology as an example.

When we look at the future of exportation, we are going to be at an advantage or have a competitive edge because we have a government that recognizes that. We have a government that not only goes out to secure trade agreements and tax agreements but also recognizes that there are other ways in which it can contribute.

That is why having Canada's investment bank, having investment hubs and supporting our economic diversification funds have all become very important to this government. If we can build on taxation fairness and trade and investment, we will have a healthier economy. On many occasions I have indicated that if we have a healthy economy, we will have a healthier middle class. Those aspiring to be a part of it, those individuals who are in need and in fact all Canadians will benefit.

It is taking a holistic approach at developing Canada's economy and being sensitive to the areas and stakeholders that we need to be listening to. At the same time, I know that these tax agreements and trade agreements are not something that have happened overnight. They have taken years to develop. I recognize that the two major parties in the House can share some of the credit in terms of the trade we have seen.

I am running out of time. To conclude my remarks, I would like to thank members for the opportunity to speak on a very important issue.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:55 p.m.

Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

Mr. Speaker, I can tell how desperate the government is right now when I hear my colleague opposite, particularly that colleague, talk about how the two major parties in the House can share credit on the trade issue. I do not think I have ever heard him say anything like that before, given that the Conservatives did most of the work. We did 46 trade agreements, and the Liberals have virtually nothing since then.

My colleague was talking a little earlier about pork. He was talking about evasion and avoidance and about investments leaving this country. As he was talking about avoidance and evasion, I could hardly help thinking that he is avoiding reality and is evading the truth. At the justice committee today, the testimony was a litany of coercion, of political corruption, of incredible pressure on a minister and of misleading information, much of it from the highest office-holder in the country, our Prime Minister.

Does he believe this epic of coercion, corruption, evasion and avoidance damages our relationships internationally? We are talking about international trade agreements. Does he think it will impact these agreements when other countries see a government demonstrating such remarkable levels of coercion and corruption at the highest level?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:55 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, the member is trying to focus his question on misleading. He started off by saying that Stephen Harper had 46 trade agreements. In reality, that is absolutely not true. The member is misleading Canadians by making that statement. The Conservative government did not sign off on trade agreements that affected 46 countries.

In fact, it has been this government that was ultimately able to take the negotiations that had already begun but had not been finalized and get them across the goal line. To try to give the impression that the EU agreement, as an example, was finalized by the Conservatives is wrong. That is not the case. It is far from reality.

To answer my colleague's question, there is no doubt in my mind that the Conservatives are very good in opposition. I hope they are in opposition for many more years. At the end of the day, they are masters at misleading themselves. We saw a good example of that, and I look forward to any other questions.

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

4:55 p.m.

Conservative

Ed Fast Conservative Abbotsford, BC

Mr. Speaker, as the minister who actually negotiated trade agreements with 46 different countries, I can say that those agreements represent a huge step forward for Canadians in opening up markets in the European Union and the Asia-Pacific region.

I would like to ask the member a question that is similar to the one asked by my colleague, the member for Cypress Hills—Grasslands. We have just heard incredibly damaging, appalling testimony from a courageous former attorney general and justice minister about corruption taking place in the highest office in this country, involving the most powerful man in this country and one of the most powerful corporations in this country. What on earth would possess the member for Winnipeg North to think the rest of the world wants to do business with such a corrupt government?

Canada–Madagascar Tax Convention Implementation Act, 2018Government Orders

5 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I have been a parliamentarian for 30 years and I know when people are ramping things up with political rhetoric, and I suspect that over the next few days we are going to witness a lot of political partisanship being ramped up by the other side.

I have a fairly good idea of what I believe is important and what the constituents of Winnipeg North believe is important, and those are the things on which I am going to focus my attention. The Conservative Party wants to focus—and always has been focused, virtually since day one after losing—on personal attacks and on things that are not related to issues of importance to Canadians, those being the middle class, jobs, our health care and so many other issues.

Our government will continue day in and day out to fight for these things, and we are starting to see the results. The numbers are amazing. Hundreds of thousands of children have been lifted out of poverty. We have hit targets three years before they were supposed to be hit. More than 800,000 jobs have been generated.

Let the Conservatives to continue with their political rhetoric; we are going to focus on Canadians and the economy and on making life better for all Canadians.